Oxford Instruments Acquiring Andor Technology

By Melinda Rose, Senior Editor

ABINGDON, England, & BELFAST, Northern Ireland, Dec. 13, 2013 — Oxford Instruments plc is acquiring Andor Technology for approximately £176 million (about $286.5 million) in cash, the company announced this week. The deal, being made through a subsidiary, helps Oxford increase its focus on the fast-growing nano-bio market.

In early November, Oxford Instruments offered 500 pence per share in cash, or £160 million, for the company, but Andor rejected it, saying it was undervaluing the business.

Under the deal announced this week, Oxford will acquire Andor through its subsidiary, Oxford Instruments Nanotechnology Tools Holdings Ltd., for 525 pence per share. The offer represents a 31 percent premium over Andor’s Nov. 11 closing price of 400 pence per share, and 77 percent more than Oxford’s initial offer to Andor in July, when Andor’s per-share closing price was 296 pence.

Andor’s board is unanimously recommending that its shareholders accept the new offer, as it “recognizes the important role which our highly capable and professional staff have played in building Andor into the unique entity we have today and creates a framework in which our staff can continue to thrive and grow the business under new ownership,” Andor chairman Colin Walsh said. “Secondly, after several months spent carefully evaluating our strategic alternatives, the board believes that the offer represents the best possible means of maximizing shareholder value in the short to medium term.”

The first technology business spun out of Oxford University, Oxford Instruments provides new-generation tools and systems for fundamental physics research with nanotechnology applications and industrial sectors. Its total revenue for the fiscal year that ended March 31 was £350.8 million (about $571 million). The company, based in Abingdon, has more than 1800 staff worldwide and is listed on the London Stock Exchange.

Established in 1989 as a spinout from Queen’s University in Belfast, Andor develops and manufactures high-performance scientific digital cameras for academic, industrial and government applications. The company focuses on four market segments: Research (ultrasensitive imaging cameras and spectroscopy products to academia and government-funded research institutes), Microscopy Systems (complete confocal systems, primarily for live-cell research applications), OEM (products sold to instrumentation manufacturers) and Software (image analysis software typically sold to research institutes).

Andor now employs more than 400 in offices in Europe, North America and Asia Pacific. For the financial year that ended Sept. 30, it reported revenues of £54.6 million (about $88.8 million) and adjusted profit before tax of £7.4 million.

In October, it completed the acquisitions of Spectral Applied Research Inc. of Canada, which specializes in the design and manufacture of optical systems for the cell biology research community; and Apogee Imaging Systems Inc. of the US, which complement the range of cameras and associated products it offers to research and OEM customers.

Oxford Instruments said the acquisition is highly complementary to its Nanotechnology Tools Div., and as both companies currently sell to academic customers, “together, the companies could offer a broad range of high-quality instrumentation to scientific users, as well as leveraging a more powerful distribution network.”

“We believe Andor is a ‘one of a kind’ business and, like Oxford Instruments, is an outstanding example of how the very best in UK science can be successfully commercialized across global markets. We are confident that Andor will add tremendous value to the growth plan for the combined business,” Walsh said.

Oxford Instruments intends to keep Andor’s employees, and no changes are planned to its Belfast locations. The senior management teams of both companies will work together to complete the merger and “maintain the strong cultural heritage of both firms,” Oxford said.